Assignment: Manilow Aging Analysis
Manilow Company has asked you to help create year-end journal entries. They are currently reporting $555,000.00 in accounts
receivable and they have sent you a download of their accounts receivable subsidiary ledger for your review, along with the A/R
general ledger and the GL print-out of the Allowance Account.
Instructions
Calculate the following items:
1. Using the attached spreadsheet, complete the:
a. Net Realizable Value of Accounts Receivable using the aging analysis.
b. Allowance for doubtful accounts amount.
c. Bad debt expense.
2. Manilow Company also wants to know how close they would be to the same result if they used the % of sales method
monthly.
a. Use Total credit sales for the year = $4,800,000 and estimated bad debt expense = 0.5% of sales.
b. Calculate the % of sales you would tell Manilow Company to use to come close to the Allowance for doubtful
accounts total from 1(a).
Part 1(a): Net Realizable Value
Manilow Corporation
Accounts Receivable Aging Analysis
as of 30-Sep-20
current
invoice date 0–30 days 31–60 days 61–90 days 91–120 days >120 days
ABC Company 9/1/2020 $ 25,000.00 $ 25,000.00 $ - $- $- $-
9/30/2020 $ 99,500.00 $ 99,500.00 $ - $- $- $-
Babab, Inc. 3/3/2019 $ 15,000.00 $- $- $- $- $ 15,000.00
Assignment: Manilow Aging Analysis. Authored by: Joe Cooke. Provided by: Lumen Learning. License: CC BY: Attribution
7/31/2020 $ 35,000.00 $- $- $ 35,000.00 $ - $-
Country, LLC 9/5/2020 $ 15,000.00 $ 15,000.00 $- $- $- $-
6/15/2020 $ 10,000.00 $- $- $- $ 10,000.00 $ -
Debo, Co. 8/15/2020 $ 15,000.00 $- $ 15,000.00 $ - $- $-
4/20/2020 $ 20,000.00 $- $- $- $- $ 20,000
LaLa Land 9/9/2020 $ 5,000.00 $ 5,000 $- $- $- $-
9/30/2020 $ 125,000.00 $ 125,000.00 $ - $- $- $-
Monte and Sons 9/11/2020 $ 2,800.00 $ 2,800.00 $- $- $- $-
8/4/2020 $ 25,000.00 $- $ 25,000.00 $ - $- $-
Operational Orgs 9/13/2020 $ 42,200.00 $ 42,200.00 $ - $- $- $-
8/31/2020 $ 45,000.00 $ 45,000.00 $ - $ $- $-
Ready Mix 9/15/2020 $ 35,000.00 $ 35,000.00 $ - $- $- $-
9/16/2020 $ 40,500.00 $ 40,500.00 $ - $- $- $-
Probability of collection 95% 90% 80% 70% 40%
Net realizable value
Allowance for doubtful
accounts
Accounts Receivable (last month of the fiscal year)
Bal fwd from 8/31/2018 $410,000
Assignment: Manilow Aging Analysis. Authored by: Joe Cooke. Provided by: Lumen Learning. License: CC BY: Attribution
SJ 52 $25,000
SJ 52 $15,000
SJ 52 $10,000
SJ 52 $5,000
CRJ 44 $65,000
GJ 99 dtd 9/10/2020 3,000.00 Bad debt written off
SJ 52 $2,800
SJ 52 $42,200
SJ 52 $35,000
SJ 52 $43,500
SJ 52 $125,000
SJ 52 $99,500
CRJ 44 $190,000
$555,000
AJE
Balance as of 9/30/2019 $555,000
Part 1(b): Allowance for Doubtful Accounts Amount (entire fiscal year)
Allowance for
Doubtful Accounts
Bal fwd from 10/1/2019 $65,000
GJ 23, dtd 12/31/2019 $2,500
GJ 40, dtd 3/7/2020 $15,500
GJ 87, dtd 7/15/2020 $4,000
GJ 99 dtd 8/1/2020 $3,000
Unadjusted balance $40,000
AJE
Balance as of
9/30/2020 $40,000
Assignment: Manilow Aging Analysis. Authored by: Joe Cooke. Provided by: Lumen Learning. License: CC BY: Attribution
Part 1(c): Bad Debt Expense (entire fiscal year)
Bad Debt Expense
Bal fwd from 10/1/2019 -
Unadjusted balance -
AJE
Balance as of
9/30/2020
Part 2: Percentage of Sales Method Monthly
Sales (annual) 4,800,000.00
% of sales for bad debt 0.50%
Total allowance for bad
debt
Allowance for
Doubtful Accounts
Bal fwd from 10/1/2019 $65,000
GJ 23, dtd 12/31/2019 $2,500
GJ 40, dtd 3/7/2020 $15,500
GJ 87, dtd 7/15/2020 $4,000
Assignment: Manilow Aging Analysis. Authored by: Joe Cooke. Provided by: Lumen Learning. License: CC BY: Attribution
GJ 99 dtd 8/1/2020 $3,000
Unadjusted balance $40,000
AJE
Balance as of
9/30/2020 $40,000
Bad Debt Expense
Bal fwd from 10/1/2019 -
Unadjusted balance -
AJE
Balance as of
9/30/2020
Allowance for doubtful accounts - Part 1(a)
Percentage Manilow Company should use:
Sales (annual) 4,800,000.00
% of sales for bad debt %
Total allowance for bad
debt
Assignment: Manilow Aging Analysis. Authored by: Joe Cooke. Provided by: Lumen Learning. License: CC BY: Attribution
Allowance for doubtful accounts - Part 2
Assignment: Manilow Aging Analysis. Authored by: Joe Cooke. Provided by: Lumen Learning. License: CC BY: Attribution